But the second day of a trial on the plan took an unexpected turn when the presiding judge insisted on coming up with a potential settlement figure Detroit could provide to satisfy one of its most dogged critics, New York-based bond insurer Syncora Guarantee Inc. Federal bankruptcy Judge Steven Rhodes said he wanted to know how much it would take for the bond insurer to settle with the city.

"I wanted a percentage and I want it now," Judge Rhodes told the bond insurer's lawyer.

Seventy-five cents on the dollar, said Marc Kieselstein, an attorney for Kirkland & Ellis who represent Syncora, which has said that the city's plan calls for paying the bond insurer less than 10 cents on the dollar of the estimated $400 million owed.

And how would the city come up with the difference? the judge asked.

"You could sell one or two pieces" and take out loans based on the value of several other pieces at the city-owned Detroit Institute of Arts and have the money to pay off Syncora, Mr. Kieselstein said. The city also could be pressed to raise taxes to increase its payout to creditors receiving cents on the dollar of the billions owed, he added.

After more than a year in bankruptcy court, Detroit asked Judge Rhodes this week to approve its plan to slash $7 billion in debt and get on the road to solvency.

"The evidence will show that Detroit will have a better future after" it emerges from bankruptcy, said the city's lead attorney Bruce Bennett on Wednesday. "We will show that the plan will succeed."

The trial aims to determine whether the city's plan is viable and just in its treatment of creditors, who are owed about $18 billion. Many of the cost-cutting provisions already have been accepted by bondholders, city workers and others, but they need the judge's approval before Detroit can exit bankruptcy.

Those opposed to the plan, including several bond insurers, argue that it unfairly benefits city pension holders over other creditors. They also argue the proposal isn't feasible in part because it fails to maximize the value of the city's world-class art collection. The plan "cannot be confirmed without doing mayhem to the rule of law," Mr. Kieselstein said.

The trial could last until well into October.

Mr. Bennett on Tuesday said new tax revenue isn't available to pay off debts because of state legal limits and the potential harmful effects of scaring away residents and businesses.

But in a presentation filled with video clips from depositions given by city officials and consultants, Mr. Kieselstein disputed that notion.

The bond insurer argued that the city never completed a detailed analysis to determine whether raising taxes would further harm the city substantially. Detroit also failed to research how many city employees might quit if their benefits were cut more, the attorney added.

"A 75 % recovery for all creditors, Syncora as well as pensioners, can best be accomplished if we maximize the value of the art collection as well as other assets," Syncora said in a statement. "The city has many options for raising revenue that have not been explored fully enough. This will be proven during the course of court proceedings."

In rough numbers, Mr. Bennett said the plan would reduce the city's overall long-term obligations of about $18 billion by around $7 billion. The proposal also calls for net new spending for reinvesting in city services

Federal mediators working on the case arranged for the equivalent of more than $800 million in state and private funding so the city could spin off its art collection to a separate nonprofit and use the proceeds to help fund a shortfall in the pension system.

Attorneys for creditors, however, challenged that figure Wednesday, saying it amounted to about $455 million, a fraction of the more than $8 billion estimate for the entire collection commissioned by creditors.

Mr. Bennett has argued that the city needs to preserve, rather than sell, its collection at the Detroit Institute of Arts under the so-called grand bargain with the state and private foundations.

The art, Mr. Bennett said, is one of the city's few assets "that might draw residents back."

But creditors on Wednesday said city officials never completed any analysis that supports that claim. They also contend the art could be sold or a loan taken out using the collection as a collateral to offer creditors a reasonable repayment.

After the trial, the judge must either confirm or reject the plan. The trial is considered the final phase in the city's bankruptcy case which was filed in July 2013.

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